Allen Markel, REALTOR® · Texas Premier Realty

Selling Option

Sell Your Home and Become the Lender

Owner financing turns your equity into a monthly income stream at attractive interest — with a substantial down payment up front and the home itself securing every payment.

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Is this right for you?

The honest fit

Best for

  • You own the home free and clear (or close to it) and want monthly income at above-bank interest instead of a lump sum
  • A unique or hard-to-place home — or you simply want the widest possible buyer pool
  • Tired landlords who want the monthly income without the tenants, toilets, and 2 a.m. calls

Maybe not if…

  • You still owe a meaningful mortgage balance — the loan's due-on-sale clause makes this a poor fit, and we check that first
  • You need all of your proceeds now — for your next home or to pay something off
  • You wouldn't be comfortable, even with an attorney and a servicing company behind you, being someone's lender for years

The process

How it works

  1. 01

    Fit check — we look at your equity, payoff, and goals, and run the honest math against a bank-financed sale before you commit to anything.

  2. 02

    Set the price and terms — asking price, down payment (typically 15–20% or more), interest rate, and term. The buyer is vetted, with a licensed loan originator (RMLO) involved when the rules require one.

  3. 03

    A Texas real-estate attorney papers it — warranty deed, promissory note, and deed of trust. You deed the home at closing, exactly like any sale; you hold a lien, like a bank.

  4. 04

    The servicing company takes over — collects the payments, escrows taxes and insurance, sends the tax forms. Your job is receiving the income.

The trade

What you get — and what to weigh

What you get

  • Monthly income at above-market interest — typically 1–3 points over conventional mortgage rates
  • A substantial down payment — typically 15–20% or more — in cash at closing
  • The home itself as collateral, with Texas's fast remedies if payments ever stop
  • Pricing power from a bigger buyer pool — often full price or better
  • Zero landlord duties — the buyer owns the repairs, taxes, insurance, and HOA
  • Capital gains spread across the years payments arrive — not piled into the one year you close — while interest accrues on the full balance the whole time (installment-sale treatment; your CPA confirms)

The trade-offs (straight talk)

  • Your money arrives over time, not as a lump sum
  • Buyer default means a foreclosure process — attorney-handled, but real
  • Works best when you own the home free and clear
  • Attorney, originator, and servicing costs apply
  • Not a do-it-yourself deal — done only with the professional stack

Typically qualifies

  • • You own free and clear, or can pay off the balance at closing
  • • Financing one home sale in a 12-month period — no originator license needed
  • • Comfortable with your money arriving over years, secured by the home

“In a bank-financed sale, the bank earns the interest on your buyer's loan. In an owner-financed sale, you do — and I make sure it's structured so you're protected like a bank, too.”

Homes sold
175+Homes sold
In closed sales
$54M+In closed sales
Texas markets served
2Texas markets served
Counties served today
6Counties served today

Career totals across two Texas markets — DFW, then Greater Houston.

American homeowners are sitting on record equity — the average mortgaged homeowner holds roughly $310,000 of it. I'll show you the income math on your actual numbers before you decide anything.

Questions, answered

Frequently asked questions

In a bank-financed sale, the buyer borrows from a bank and the bank earns the interest. In an owner-financed sale, you become the lender: the buyer brings a substantial down payment to closing, you deed them the home exactly like any sale, and they make monthly principal-and-interest payments to you — secured by a lien on the home, just as a bank's loan would be.

See your owner-finance income math

Tell me about your home and what you oweI'll show you the down payment, the monthly income, and the protections on your actual numbers.No obligation.

Call (832) 709-2540

Allen Markel is a licensed Texas REALTOR®, not a lender, attorney, or CPA. Owner-financed sales are structured with a Texas real-estate attorney and, where required, a licensed residential mortgage loan originator (RMLO). Nothing on this page is legal or tax advice.

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Allen Markel, REALTOR® · Texas Premier Realty · TREC #0658294

Questions about Owner Financing

The honest fit

  • Who should not use owner financing?

    It is usually a poor fit if you still owe a meaningful mortgage balance, if you need all of your proceeds now for a next home or to pay something off, or if you would not be comfortable acting as someone's lender for years. Your lender and a Texas real-estate attorney can tell you how your existing loan affects the idea. We would rather tell you it is a poor fit than sell it to you.

  • Can I do owner financing if I owe money on the house?

    It depends on your loan, so start by asking your lender how your mortgage treats a sale, and have a Texas real-estate attorney review it. Owner financing is simplest when the home is owned free and clear or the balance is paid off at closing. Workarounds exist but carry risk and belong in an attorney's hands. We run the payoff and equity numbers first so you know where you stand.

  • Do I need a loan originator license to do this?

    That is a question for your attorney, because it depends on how many sales you finance and how the note is set up. A licensed loan originator is regulated to take a borrower's information and match it to a loan. We raise early whether one should be involved. Ask your attorney: does my deal call for an originator, and what would that add to the cost?

  • Do I need an attorney for owner financing?

    A Texas real-estate attorney is a core member of the team. They prepare and explain the legal documents, answer legal questions and look out for your position. We are REALTORS, not attorneys, so we do not draft them or give legal advice. We coordinate with your attorney, the title company and the servicing company so the sale stays on track. Ask your attorney what they will prepare and what it costs.

  • What if my property has liens or title problems?

    A title company searches the property's records and tells you what is showing, and your attorney explains what it means for the sale. We recommend finding out early, because anything in the way is easier to deal with before you have a buyer and a closing date. Ask the title company for a list of what they found and what it would take to clear each item.

  • Why would a buyer choose owner financing?

    Some buyers cannot qualify at a bank, some want flexibility, and some like a simpler process. The buyer you want is motivated and brings a meaningful down payment. We help you decide whether the terms make sense for both sides, and we compare the sale with a bank-financed one.

  • What if I change my mind partway through?

    Before documents are signed you can switch to another way to sell, such as a traditional listing or a cash offer. Telling us early costs little. After closing, changing course is harder, which is why the fit check comes first. We compare the options in net dollars before you commit.

How it works

  • How does owner financing work step by step?

    First a fit check of your equity, payoff and goals, with the math compared against a bank-financed sale. Next you and the buyer set price and terms. A Texas real-estate attorney prepares the closing documents, a title company handles the closing, and a servicing company then collects payments, manages taxes and insurance and sends year-end forms. Each advisor has a role, and we coordinate them so you are never working alone.

  • What documents are used in an owner-financed sale?

    A Texas real-estate attorney chooses and prepares the documents, so the list is theirs to give you. In general, expect a deed that moves the home, a promissory note that records the payment promise and a security document that ties the home to that promise. Ask your attorney what each one does in your deal. Please do not use forms downloaded online.

  • Who owns the house after an owner-financed sale?

    In general the buyer takes ownership at closing, as in any sale, and you hold security for the loan, much like a bank would. How that is documented is for your attorney to explain. Day to day, the buyer usually takes on repairs, taxes, insurance and any association dues, and the servicing company can track the taxes and insurance. Ask your attorney and the title company to walk you through it.

  • Who sets the interest rate and the down payment?

    You and the buyer agree on them, with our guidance. We help with the market side, such as what recent sales say about price and what buyers can realistically bring as a down payment. Your attorney and, when one is involved, a licensed loan originator advise on how the note is structured. Ask each of them what they check before anything is signed.

  • Is owner financing the same as rent to own?

    No, they are different structures. In owner financing the buyer purchases the home at closing and pays you over time. In rent to own the person rents first, with the purchase coming later. The risks, the paperwork and who carries what in the meantime differ, so an attorney reviews either one. Our financing solutions page explains how the structures compare.

  • How is the buyer vetted?

    We look at the buyer's ability to pay and their down payment, and a licensed loan originator is involved when the rules require one. You are not taking someone's word. A careful look at the buyer matters more here than in a bank-financed sale, since you carry the risk.

  • What is a servicing company and why do I need one?

    A servicing company collects the monthly payments, tracks them against the schedule, escrows taxes and insurance, keeps the payment history and sends year-end tax forms. It means you never play bill collector. It also gives a clean record if the buyer ever stops paying. A modest fee applies.

  • Can the buyer pay off the loan early?

    It depends on how the note is written. Early payoff can be allowed or limited by the terms you agree on. A buyer might refinance with a bank later, which pays you out. Ask your attorney how to write the note and whether to include a balloon date.

  • Can I sell the note later if I need the money?

    Often yes. A performing note with a documented payment history can be sold to a note investor, typically at a discount. So if your circumstances change, the money is not locked up forever. The discount is a real cost, so we treat it as a backup, not a plan.

What you get and what to weigh

  • What is a balloon payment in owner financing?

    A balloon is a larger final payment due after a set period, while the regular payments are calculated over a longer schedule. It lets you be paid out sooner than a full-term plan would. Whether to include one, and how, is a question for your attorney and your CPA. Ask them what happens if the buyer cannot refinance when the balloon comes due.

  • What are the tax effects of owner financing?

    That is a question for your CPA or tax advisor, and we do not give tax advice. In general, receiving money over time can be treated differently from receiving it all at once, so ask your CPA how that applies to your sale. We can give you the sale numbers and the payment schedule to bring to that conversation.

  • What happens if the buyer stops paying?

    Your attorney would advise you on the options and handle the process, so ask about it before you agree to anything. Ask what the steps are, how long they take, what they cost and what usually happens to the payments already made. A servicing company keeps the payment history. We cannot promise an outcome, which is why a strong down payment and careful buyer review matter.

  • Can I get the house back if the buyer defaults?

    That is a question for your attorney, who can explain the options and the process for your note. We cannot promise any outcome. What we can do is help reduce the chance of it happening: a careful look at the buyer, a meaningful down payment and a price supported by recent sales. Ask your attorney what recovering the home would involve and what it would cost.

  • What happens to the note if I pass away?

    That is a question for your estate planning attorney, since the note is a financial asset and what happens to it depends on your plans. Ask whether your heirs would be set up to receive payments and whether the servicing company can keep working with them. We can explain how an owner-financed note fits into a sale so you arrive with clear questions.

  • What are the main risks of owner financing?

    The buyer may stop paying, and your attorney would advise you on what to do, so ask about that process before you agree. Your money also arrives over time instead of at once, and the buyer's situation or the home's condition can change. Experienced advisors on your team, such as an attorney, a servicing company and a title company, reduce the risk but do not remove it.

  • Can I sell the note later if I want cash?

    Some sellers later sell the note for a lump sum, with a price that depends on the buyer's payment record and the terms. Ask your attorney and CPA how that would work for your note before you agree to terms. We help you think through your cash needs now and later.

Your team of advisers

  • What do the attorney, the servicing company and the title company each do?

    A Texas real-estate attorney advises you and prepares the legal documents. A servicing company collects payments, tracks the balance, manages taxes and insurance and sends year-end forms. A title company researches the property's records, handles the closing and records the documents. We are REALTORS, and we coordinate the team and the market side. We do not give legal advice.

  • What does a REALTOR do in an owner-financed sale?

    We help set the price from recent sales, market the home to a wider pool of buyers, check each buyer's readiness, compare the sale with other options in net dollars and coordinate the team. We do not give legal or tax advice and we do not draft the documents. You should see the numbers before you decide anything.

  • What questions should I ask the attorney?

    Ask what documents they will prepare, how an existing loan, if any, affects the plan, what happens if the buyer stops paying, how to handle early payoff and a balloon, how the rules affect the way the note is set up and what it will cost. Take notes and ask for answers in writing. We help organize the list.

  • What questions should I ask a servicing company?

    Ask what they charge, how payments are collected, how they handle taxes and insurance, what they do when a payment is late, what reports and forms you receive and what happens if you want to sell the note later. Compare more than one. We can help you collect quotes.

Vetting the buyer

  • What should I ask a buyer who wants owner financing?

    Ask about their down payment, how they document their earnings, their other debts, why they are not using a bank, how long they plan to stay and how they will keep up the home and insurance. A loan originator may review the file. The questions matter more here because you carry the risk.

Is this right for you

  • Who is owner financing a good fit for?

    It tends to fit a seller who owns the home free and clear, or close to it, and wants monthly payments instead of one lump sum. It can also suit a unique or hard-to-place home, or a landlord tired of tenants. It does not fit everyone, so we start by checking your equity, payoff and goals. Talk to us to see if it fits.

  • Is owner financing a good idea for a landlord?

    It can be, for a landlord who wants the monthly payments without managing tenants or repairs. After a sale the buyer owns the upkeep, taxes, insurance and any HOA. The tradeoff is that your money arrives over time. We compare it with a plain sale and with keeping the rental so you can judge.

  • Does owner financing work for a home that is hard to sell?

    It can, because it widens the buyer pool to people a bank might turn away. That sometimes helps a unique property that does not fit standard lending. It is not a rescue for an overpriced home, though. The price and terms still have to make sense to a buyer, and we check that first.

  • What if I need cash from the sale for my next home?

    Then owner financing may not fit, since you receive a down payment and then payments over time rather than all proceeds at closing. If you need most of the money now, a traditional sale or another route can be better. We look at your next step before deciding.

  • Is owner financing only for people who own their home outright?

    It is the cleanest case. If you have a small balance you can pay off from the down payment at closing, it can still work. The question is whether the loan is fully cleared when you deed the home. We review your payoff and equity as the first step.

  • What if I am uncomfortable being a lender?

    Take that seriously. Being a lender means years of a financial relationship secured by the home. A servicing company handles collection and paperwork, and an attorney papers the deal, but the risk of default is still yours. If it feels like too much, a regular sale may be the better choice.

  • Does owner financing make sense for a vacant lot or land?

    Land sales are often seller financed, but this page is about homes, and the details differ for land. We would look at it case by case. Tell us about the property and we will say whether it fits.

Cost and timing

  • How long does an owner-financed sale take to close?

    It can take a bit longer than a simple cash sale because of the extra documents and the vetting of the buyer. It is usually comparable to a regular financed sale, since you are not waiting on a bank underwriter. Timing depends on the buyer and the attorney. We outline it up front.

  • What costs are involved in owner financing?

    Attorney fees, possibly a loan originator, the servicing company and the usual closing items. These costs are real and should be compared with the extra you might earn. We lay out the numbers before you commit. Ask us for the full picture.

  • How much interest can I expect to earn?

    It is negotiated, and it often runs a bit above conventional mortgage rates, which is part of the appeal, but we do not quote a number here since it changes with the market and the buyer. We show you the actual math on your numbers during the fit check.

  • How big a down payment should I ask for?

    A substantial one. A solid down payment gives the buyer real skin in the game and reduces your risk, and it puts cash in your pocket at closing. The right amount depends on the price, the buyer and your goals. We help you set it.

  • Does owner financing let me ask a higher price?

    Sometimes, since you widen the buyer pool and offer flexibility a bank cannot. But a higher price still has to be supported by the home and the market. We check the price against recent sales so the number is believable.

Preparing

  • What should I prepare before offering owner financing?

    Your mortgage payoff status if any, title information, the home's condition, and your goals for the money. Gather your tax advisor and attorney early. The more you know about your equity and timeline, the faster the fit check goes.

  • Should I check my credit and finances before doing this?

    It is worth knowing your own position, mostly your payoff, any liens and your cash needs. The buyer's finances matter more, since you carry their risk. We help you think through what you need from the buyer.

Risks

  • Is owner financing risky compared with a bank sale?

    It carries more risk for you, since you rely on the buyer rather than receiving all the money at once. The home as collateral and a solid down payment help. The reward is monthly payments and often a wider buyer pool. Whether it is worth it depends on your situation.

  • What if the buyer lets taxes or insurance lapse?

    That is why the servicing company escrows them. It collects a portion with each payment and pays the bills, which protects the home that secures your note. Without escrow, a lapse could hurt your collateral, so we recommend it.

  • What if the home loses value after I sell?

    Your lien is on the property, so a drop in value reduces your cushion if the buyer defaults. A strong down payment helps. This is one reason we look at price and buyer strength carefully before you agree.

Getting started

  • How do I find out if owner financing fits me?

    Start with a fit check. We look at your equity, payoff and goals, and compare the numbers against a bank-financed sale. There is no commitment. Reach out and we will show you the math on your numbers before you decide anything.

  • What should I ask before agreeing to owner financing?

    Ask about the buyer's ability to pay, the down payment, the interest rate and term, who services the loan, who pays what, what happens on default and how it affects your taxes. We help you ask these and bring in your attorney.

  • How do I find a buyer for an owner-financed home?

    We market the home with the owner-financing option so it reaches the wider pool of buyers it can attract. Then we vet the buyer. We do not lead with a lower price, since flexible terms are a selling point.

Compared with other options

  • How does owner financing compare with a traditional sale?

    A traditional sale gives you the money now. Owner financing gives you a down payment and then payments over time, often with a wider pool of buyers and sometimes a higher price. Neither is automatically right. We compare the two for you.

  • How does owner financing compare with a cash offer?

    Cash gives a fast lump sum, usually at a discount. Owner financing spreads the proceeds over years and may bring a higher price, but needs time and trust. They solve different problems. We compare them against your goals.

  • Is owner financing better than renting the house out?

    Renting keeps you as a landlord with tenant and repair duties. Owner financing transfers the home and those duties to the buyer, while you collect payments. The right choice depends on your finances and goals. We compare them for you.

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